UPDATE 1-Polish watchdog says no decision on BNP Paribas deal before August

(Updates with responses from BNP Paribas, Rabobank)

WARSAW Feb 20 (Reuters) - Polish financial regulator KNF
will not rule on French lender BNP Paribas's proposed
$1.4 billion takeover of Rabobank BGZ before August,
the watchdog's deputy head was quoted as saying on Thursday.

BNP agreed last year to buy the Dutch lender Rabobank's
Polish business, the east European country's
eleventh-largest bank by assets, as it returned to the
acquisition trail after a period of restructuring.

But the deal needs approval from KNF, which has previously
signalled its scepticism about further consolidation in the
Polish banking sector and said it would take a close look at the
transaction.

KNF's Wojciech Kwasniak told local daily Puls Biznesu the
deal was complex and the decision process coincides with the
asset quality review and banking stress tests taking place
throughout Europe.

"According to assumptions, the asset review will end in July
and stress tests will start at the turn of August and September,
with their results to be known in October," Kwasniak said. "For
our opinion (on the BNP deal), we need at least the information
about the asset review results."

Asked about Kwasniak's comments, a BNP representative in
Paris declined to comment.

Rabobank spokeswoman Milou Verhaegh said the bank
understands the Polish regulator has to follow a certain
process. She said the bank does not know when that process will
end, but hopes it will be as soon as possible.
(Reporting by Adrian Krajewski in Warsaw, Lionel Laurent in
Paris and Sara Webb in Amsterdam; Editing by David Evans)